** Remember that a pre-approval is not a guarantee of a mortgage. The Lender also has to approve the property that you choose. If there is a job loss, change in credit (more liabilities than disclosed or a drop in your score) or any other material change the Mortgage pre-approval may be pulled – it’s important to work with a Broker who can protect you and present you with other Lender options should there be a change in your circumstances.
2. Ask your Broker/Bank Rep about the penalties that may be associated with the fixed rate mortgage term they may be quoting you. A 5 year fixed rate from the bank can come with punitive penalties (think 4.5% of your balance) if you decide to break the mortgage before the end of the term for any reason – and 6/10 Canadian’s will so it’s important to protect yourself. There are many products and lenders who have fairer penalty calculations.
3. Ask your Broker/Bank Rep about the Property Transfer Tax Exemption that you may be entitled to as a first time home buyer.
4. What are closing costs? Consider legal fees, appraisal costs, title insurance, home inspection, property taxes, interest adjustment date – it’s important to have all of the closing costs explained to you in advance.